Direct marketers will watch closely as three of the U.S. Postal Service's labor unions gear up to meet with postmaster general William Henderson on Aug. 24 and 25.
The two largest postal unions — the American Postal Workers Union (APWU) and the National Association of Letter Carriers (NALC), will discuss the renewal of their arbitrated contracts, which expire Nov. 20. A smaller union, the National Postal Mail Handlers Union, also will be there. Henderson is interested in a negotiated agreement as opposed to the last two, which in 1990 and 1994 were arbitrated, said Pete Garwood, manager of equal employment opportunity compliance and appeal at the USPS.
“It's always better for the parties to reach agreements rather than have a third party set the agreement for them,” said Garwood, who spoke on behalf of senior vice president for labor relations Jack Potter, who will lead the negotiations.
The unions seem to want a negotiated agreement as well.
“[A negotiated agreement] is where we want to go,” said George Gould, legislative and political director of the NALC, which represents 315,000 letter carriers. The APWU, which is the USPS' largest union, representing 340,000 USPS clerks, did not return calls for comment.
Postal insiders say there is a good chance that an agreement will be negotiated this time. A major part of a negotiated agreement is trust, Gould said, and he trusts the new PMG.
“Most times, our lack of an ability to reach an agreement is because we really don't know where the other person is coming from,” he said, “but the fact that the postmaster general has said he wants a negotiated agreement, is willing to participate himself and appears not to have an attitude goes a long way. Service is up, standards are up and the service is financially healthy … and, frankly, this should facilitate a negotiated agreement.”
Negotiations still could be a long and painful process that may lead to arbitration, especially if the unions ask for higher wages as a result of the USPS' four years of $1 billion-plus revenues. Gould wasn't specific about what his organization will seek.
Leaders in the direct mailing community also would like to see a negotiated contract.
“What has happened in the past, sadly, is that there is a binding arbitration, and that's not what anybody wants,” said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association. “We prefer to have something that is negotiated by management, accepted by unions and that hopefully will control costs and be agreed upon rather than something that is proposed by a third party.”
DMers are worried that if the unions get the money they want, mailers may be the ones who pay the price.
“Around 80 percent of all postal costs are labor related — including wages, benefits and salaries,” Cerasale said. “If you have a significant increase in labor costs, that eventually will force the postal service to come in and ask for higher rates.”
Cary H. Baer, a New York-based direct marketing consultant and chairman of the Advertising Mail Marketing Association, said the issue isn't just about wages. Since the revenue from First-Class mail has been flat lately, management and labor leaders need to make sure that they are working together to increase productivity and that the USPS stays profitable.
“I think the issue, which has not been addressed in the last couple of negotiations, is how grievances can be reduced and how can work rules be changed to enhance productivity and [to find out if ] there is a way for the postal service to incent the [union] employees based on productivity,” Baer said. “If the postal service is able to get an agreement that provides both an increase of the employees' wages, but provides long-term productivity, work-rule benefits for the postal service and some kind of incentive compensation, then I think it will be a good agreement.”
The Aug. 24-25 dates signal the start of a formal negotiating process that will allow unions and the USPS to decide on new national agreements. The meetings are a formal requirement based on collective bargaining rules under the National Labor Relations Act, which states that groups must begin formal negotiations 90 days before their contract expires.
While these groups have been meeting regularly for the past year, “these dates signal when the bargaining really starts,” Garwood said.